Information and commentary about the struggle for democracy in the African kingdom of Swaziland

Monday, November 19, 2012

MINISTER WRONG OVER SACKING WORKERS

Swaziland’s Minister of Economic Planning and Development
Prince Hlangusemphi seriously misled people when he said that the International
Monetary Fund (IMF) was forcing the government to sack workers.

Hlangusemphi said this as part of a larger attack on the
IMF, which he claimed did not want to help Swaziland get out of its financial
mess.

Hlangusemphi was speaking in an interview with the Swazi Observer, the newspaper in effect
owned by King Mswati III, when he said the government would not downsize the Swazi
civil service ‘as recommended by the IMF’. He went on to say that if the government
sacked workers without consultation it would be in trouble with organizations
such as the International Labour Organisation (ILO).

But where Hlangusemphi is wrong is that the IMF has not
called for civil servants to be sacked, but it has suggested the government wage
bill should be cut by 5 percent. It has never been the IMF’s case to cut jobs
of ordinary workers: that suggestion came from the Swazi Government itself.

The IMF has been very public in its advice to the Swaziland
Government. In November 2011, for example, Joannes Mongardini, Head of the IMF
Mission to Swaziland, said there were other ways to reduce the public
expenditure bill in Swaziland without cutting the jobs or wages of ordinary
workers.

‘We are recommending for the government to reduce the
wages bill by 5 percent. This is a relatively moderate amount compared to
countries like Greece, Portugal and Ireland.’

Asked by the BBC about the position of public service workers who have complained about the
possibility of retrenchments and wage cuts, Mongardini said, ‘We fully
understand that this is a politically difficult decision to make.

‘Having said that, the government can find other ways to
reduce the wage bill that will not require salary cuts. In particular, some of
the largest increases in the wage bill in recent years are due to increased
security forces and police personnel and they also are due to very generous
allowances that the government has given to politicians and top civil
servants.’

Hlangusemphi also misled the House of Assembly last week
when he claimed that the IMF did not want to help Swaziland access funding to
revive its economy. He said the IMF had prevented organisations such as the
African Development Bank (AfDB) from giving loans to government.

But Hlangusemphi knows (or should know) that the reason
why Swaziland asked for the IMF’s assistance was so it could convince
international financers that it could repay any loans it might receive. To do
this the Swaziland Government drew up what it called a Fiscal Adjustment
Roadmap (FAR) that set out a number of measures it would introduce to cut
spending and increase income. But, the government failed to implement its own
plan.

Because of this failure, the IMF said in April 2012
it could no longer support the government. It was up to the government to come
up with a new plan that might help to save the economy.

The government has not done this. Earlier this month
(November 2012) the IMF reported the government had failed to improve the
economy in any appreciable way and could not pay its bills. This meant
immediate public expenditure cuts were needed if the government was to meet the
budget targets it set itself in February 2012.

In a statement following
its visit, the IMF said the government would find it difficult to pay its bills
this year, without increasing domestic borrowing. It also said that one reason
for this was that the government had increased spending this year on security.

Since the IMF’s November statement, there have been a
number of attempts from the Swazi Government to deflect attention away from its
own failings and to claim the IMF did not know what it was talking about.

Immediately after the IMF reported, Finance Minister Majozi
Sithole, described the IMF as biased, negative and unrealistic.

This was after Mongardini had warned the government of
bad times ahead, including a looming negative impact on sugar exports, a
tourism sector that had declined by between eight and nine percent, low
investor confidence, an envisaged decline in receipts from the Southern African
Customs Union (SACU) and possible repatriation of money from local to South
African banks.